Foreclosure Bill Would Help Troops

Stockton Record (CA) (05/01/08); Shaw, Hank
The House Veterans Committee on April 30 passed a veterans mortgage bill that includes an amendment that would allow service members and veterans to borrow up to $729,750 to refinance their federally backed loans, up from the current cap of $144,000. Rep. Jerry McNerney, D-Calif., sponsor of the refinancing proposal, says the amendment is necessary for high-cost areas such as Northern California and because service members deployed overseas often lose wages, face suspended or canceled contracts and turn to zero-down, subprime and adjustable-rate mortgages. McNerney says lending to service members would be a low risk, and data from the Mortgage Bankers Association shows that the 30-day delinquency rate on Veterans Affairs-backed loans was 6.6 percent last year, compared with 13 percent for regular FHA-backed loans and 16.3 percent for private subprime loans. The proposal would cost $10 billion over the next decade to create a fund for repaying banks for any defaults on the loans.